The Sewol ferry was carrying 476 people when it went down. More than 300 died, most of them school students.
Lee Joon-seok was among 15 crew members on trial over the sinking, one of South Korea’s worst maritime disasters.
Prosecutors charged him with homicide and called for the death penalty, but judges acquitted him on that charge.
Lee is in his late 60s, and he accepted in court that he would spend the rest of his days in jail.
The judges said that he was not clearly not the only person responsible for the tragedy and they accepted that his negligence did not amount to an intent to kill.
Crew members did not secure cargo which moved when the vessel took a tight corner, toppling the ferry, and Lee was filmed leaving the sinking ship while many passengers remained inside.
During the trial Lee Joon-seok apologized for abandoning them.
The chief engineer of the ferry, identified by his surname Park, was found guilty of murder and jailed for 30 years.
Thirteen other crew members were given jail sentences of up to 20 years on charges including abandonment and violating maritime law.
Relatives of victims were distraught at the verdict, with some weeping, according to AFP news agency.
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